Budget to Actual Comparison. For the Year Ended September 30, 2017

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Lorraine Smith
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1 to Comparison

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3 Management s Discussion and Analysis to Comparison

4 to Comparison Management s Discussion and Analysis to Comparison We offer readers this analysis of the budget to actual activities of GRU for the year ended September 30, Highlights Combined Utility Systems The combined systems withdrew $4 million from rate stabilization for the period ended September 30, 2017, including budgeted transfers to and from rate stabilization. Electric System Residential revenues are 1.5% below budget as MWh sales were 1.07% less than forecast for fiscal year Fuel adjustment revenue and fuel expense is higher than budgeted due in part to the DH2 outage which resulted in more purchased power and usage of the GREC biomass facility. Sales for resale were higher than budget due to $660,000 in interchange sales through The Electric Authority (TEA). Other income (expense) is down due to changes in the classification of certain revenue and expense accounts that occurred with the SAP implementation. This situation exists in other Systems as well. Power production expense is $1.1 million over budget primarily due to unexpected labor expense associated with Hurricane Irma. Transmission and distribution expenses are higher and administrative and general expenses are below budget primarily due to two factors: corporate shared services overhead costs of $3 million budgeted under administrative and general expense are now allocated to transmission and distribution; $2.3 million in overhead from operational areas previously treated as administrative and general are now included in transmission and distribution projects.the newly implemented SAP software allocates overhead expense at a more detailed level than the prior system that is resulting in more accurate cost allocations.this exists in the other systems also. Water System Fiscal year 2017 total water sales were just over 349,000 kgals or 5.09% higher than forecast, resulting in total water sales revenues approximately $2.4 million greater than budget. Althoughthere was heavy rainfall in the last quarter of the fiscal year, for the balance of the year rainfall levels were lower than normal.

5 to Comparison Other revenues came in below budget due to lower than expected connection fees and service charges such as turn on/turn offs and late charges. Wastewater System Fiscal year 2017 wastewater kgals billed were 2.70% more than forecast, resulting in wastewater billing revenues approximately $1.3 million greater than budget. Collection costs are higher than budget, and administrative and general costs are lower than budget due to the change in allocation methodology associated with the SAP implementation. Gas System Fiscal year 2017 therms sold were approximately 1,960,000 or 9.1% less than forecast, resulting in total gas sales revenues without fuel adjustment coming in at approximately $645,000 below budget for FY17. Residential sales revenues were lower than budget primarily related to the mild winter, while non-residential sales which are less sensitive to weather were above budget. Other operating revenues were below budget in part due to lower than planned customer service revenue collections such as turn on/turn offs, late fees and miscellaneous service revenues. Operation and maintenance expenses are higher than budget and administrative and general costs are lower than budget due to the change in allocation methodology associated with the SAP implementation. Telecommunications (GRUCom) System The budgeted transfers from the GRUCom rate stabilization fund were not made due to the balance in the fund was not sufficient to support the transfer. A loan to GRUCom was provided from another system. Other income (expense) is down due to changes in the classification of certain revenue and expense accounts that occurred with the SAP implementation. This situation exists in other Systems as well. Operation and maintenance expenses are higher than budget and administrative and general costs are lower than budget due to the change in allocation methodology associated with the SAP implementation.

6 to Statements

7 Combined Utility Systems to Comparison REVENUES: Electric system: Sales of electricity $ 128,778, ,565,968 Over/<Under> % Variance $ $ (2,212,252) (1.7) Fuel adjustment 153,980, ,490,201 8,510, Sales for resale 3,372,509 4,042, , Transfer from/(to) rate stabilization 9,813,458 9,813, Other operating revenue 6,106,144 6,022,825 (83,319) (1.4) Other income (expense) 1,176, ,954 (1,068,254) (90.8) Build America Bonds 2,878,898 2,935,564 56, Total electric system revenues 306,105, ,978,834 5,873, Water system: Sales of water 32,770,764 35,307,646 2,536, Transfer from/(to) rate stabilization (981,358) (981,358) - - Other operating revenue 2,988,311 2,338,143 (650,168) (21.8) Other income (expense) 165,520 (855,050) (1,020,570) (616.6) Build America Bonds 808, ,619 15, Total water system revenues 35,751,938 36,634, , Wastewater system: Sales of wastewater 38,931,665 40,105,516 1,173, Transfer from/(to) rate stabilization 299, , Other operating revenue 3,701,846 3,874, , Other income (expense) 187,649 (7,047) (194,696) (103.8) Build America Bonds 915, ,336 18, Total wastewater system revenues 44,035,520 45,205,190 1,169, Gas system: Sales of gas 15,110,013 14,465,128 (644,885) (4.3) Fuel adjustment 7,696,897 7,025,104 (671,793) (8.7) Transfer from/(to) rate stabilization (1,099,917) (1,099,917) - - Other operating revenue 1,580, ,597 (661,538) (41.9) Other income (expense) 119, ,585 80, Build America Bonds 602, ,682 11, Total gas system revenues 24,009,737 22,124,179 (1,885,558) (7.9) Telecommunications system: Sales of services 11,079,987 11,189, , Transfer from/(to) rate stabilization 790,616 - (790,616) (100.0) Other operating revenue 179,344 11,562 (167,782) (93.6) Other income (expense) (620) (462,444) (461,824) 74,487.7 Total telecommunications system revenues 12,049,327 10,738,541 (1,310,786) (10.9) TOTAL REVENUES 421,951, ,680,744 4,728, Page 1

8 Combined Utility Systems to Comparison Page 2 Over/<Under> % Variance OPERATION, MAINTENANCE AND ADMINISTRATIVE EXPENSES: Electric system: Fuel expenses 153,980, ,490,201 8,510, Operation and maintenance 41,227,696 49,551,764 8,324, Administrative and general 29,307,698 23,828,253 (5,479,445) (18.7) Total Electric System Expenses 224,515, ,870,218 11,354, Water system: Operation and maintenance 9,970,062 9,944,066 (25,996) (0.3) Administrative and general 6,239,599 5,519,450 (720,149) (11.5) Total Water System Expenses 16,209,661 15,463,516 (746,145) (4.6) Wastewater system: Operation and maintenance 10,878,331 13,078,881 2,200, Administrative and general 8,077,485 5,973,307 (2,104,178) (26.0) Total Wastewater System Expenses 18,955,816 19,052,188 96, Gas system: Fuel expense and purchased gas 7,696,897 7,025,104 (671,793) (8.7) Operation and maintenance 1,935,815 2,505, , Administrative and general 5,329,600 3,370,550 (1,959,050) (36.8) Total Gas System Expenses 14,962,312 12,901,558 (2,060,754) (13.8) Telecommunications system: Operation and maintenance 4,559,036 5,285, , Administrative and general 3,193,753 1,823,125 (1,370,628) (42.9) Total Telecommunications System Expenses 7,752,789 7,108,721 (644,068) (8.3) TOTAL EXPENSES 282,396, ,396,201 8,000, NET REVENUES IN ACCORDANCE WITH BOND RESOLUTION: Total electric system 81,590,043 76,108,616 (5,481,427) (6.7) Total water system 19,542,277 21,170,484 1,628, Total wastewater system 25,079,704 26,153,002 1,073, Total gas system 9,047,425 9,222, , Total telecommunications system 4,296,538 3,629,820 (666,718) (15.5) TOTAL NET REVENUES IN ACCORDANCE WITH BOND RESOLUTION 139,555, ,284,543 (3,271,444) (2.3) LESS: Debt service 61,883,881 62,571, , Debt service - UPIF (5,000,000) (5,000,000) - - UPIF contributions 46,858,096 46,858, Transfer to City of Gainesville General Fund 35,814,010 35,814, NET IMPACT TO RATE STABILIZATION - ADDITION (REDUCTION) $ - $ (3,959,380) $ (3,959,380) - Page 2

9 Electric Utility System to Comparison Over/<Under> % Variance REVENUES: Residential $ 47,968,381 $ 47,236,704 $ (731,677) (1.5) Non-residential 62,714,269 61,748,151 (966,118) (1.5) Fuel adjustment 153,980, ,490,201 8,510, Sales for resale 3,372,509 4,042, , Utility surcharge 3,113,562 2,979,234 (134,328) (4.3) Other electric sales 14,982,008 14,601,879 (380,129) (2.5) Total Sales of Electricity 286,130, ,099,033 6,968, Transfer from/(to) rate stabilization 9,813,458 9,813, Other operating revenue 6,106,144 6,022,825 (83,319) (1.4) Other income (expense) 1,176, ,954 (1,068,254) (90.8) Build America Bonds 2,878,898 2,935,564 56, Total Revenues 306,105, ,978,834 5,873, OPERATION, MAINTENANCE AND ADMINISTRATIVE EXPENSES: Fuel expenses 153,980, ,490,201 8,510, Power production 28,236,945 29,340,502 1,103, Transmission and distribution 12,990,751 19,232,279 6,241, Interchange - 978, ,983 - Administrative and general 29,307,698 23,828,253 (5,479,445) (18.7) Total Operation, Maintenance and Administrative Expenses 224,515, ,870,218 11,354, TOTAL NET REVENUES IN ACCORDANCE WITH BOND RESOLUTION 81,590,043 76,108,616 (5,481,427) (6.7) LESS: Debt service 38,449,414 38,922, , Debt service - UPIF (5,000,000) (5,000,000) - - UPIF contributions 27,046,177 27,046, Transfer to City of Gainesville General Fund 21,094,452 21,094, NET IMPACT TO RATE STABILIZATION - ADDITION (REDUCTION) $ - $ (5,954,425) $ (5,954,425) - Page 3

10 Water Utility System to Comparison Over/<Under> % Variance REVENUES: Residential $ 19,830,493 $ 21,876,220 $ 2,045, Non-residential 10,447,452 10,832, , Utility surcharge 2,492,819 2,598, , Total Sales of Water 32,770,764 35,307,646 2,536, Transfer from/(to) rate stabilization (981,358) (981,358) - - Other operating revenue 2,988,311 2,338,143 (650,168) (21.8) Other income (expense) 165,520 (855,050) (1,020,570) (616.6) Build America Bonds 808, ,619 15, Total Revenues 35,751,938 36,634, , OPERATION, MAINTENANCE AND ADMINISTRATIVE EXPENSES: Transmission and distribution 2,464,116 3,281, , Treatment 7,505,946 6,662,785 (843,161) (11.2) Administrative and general 6,239,599 5,519,450 (720,149) (11.5) Total Operation, Maintenance and Administrative Expenses 16,209,661 15,463,516 (746,145) (4.6) TOTAL NET REVENUES IN ACCORDANCE WITH BOND RESOLUTION 19,542,277 21,170,484 1,628, LESS: Debt service 6,751,417 6,863, , UPIF contributions 7,042,712 7,042, Transfer to City of Gainesville General Fund 5,748,148 5,748, NET IMPACT TO RATE STABILIZATION - ADDITION (REDUCTION) $ - $ 1,516,485 $ 1,516,485 - Page 4

11 Wastewater Utility System to Comparison Over/<Under> % Variance REVENUES: Residential $ 26,273,365 $ 27,090,198 $ 816, Non-residential 9,684,735 10,157, , Utility surcharge 2,973,565 2,858,267 (115,298) (3.9) Total Sales of Services 38,931,665 40,105,516 1,173, Transfer from/(to) rate stabilization 299, , Other operating revenue 3,701,846 3,874, , Other income (expense) 187,649 (7,047) (194,696) (103.8) Build America Bonds 915, ,336 18, Total Revenues 44,035,520 45,205,190 1,169, OPERATION, MAINTENANCE AND ADMINISTRATIVE EXPENSES: Collection 3,743,072 6,402,349 2,659, Treatment 7,135,259 6,676,532 (458,727) (6.4) Administrative and general 8,077,485 5,973,307 (2,104,178) (26.0) Total Operation, Maintenance and Administrative Expenses 18,955,816 19,052,188 96, TOTAL NET REVENUES IN ACCORDANCE WITH BOND RESOLUTION 25,079,704 26,153,002 1,073, LESS: Debt service 8,413,025 8,487,003 73, UPIF contributions 9,432,248 9,432, Transfer to City of Gainesville General Fund 7,234,431 7,234,430 (1) (0.0) NET IMPACT TO RATE STABILIZATION - ADDITION (REDUCTION) $ - $ 999,321 $ 999,321 - Page 5

12 Gas Utility System to Comparison Over/<Under> % Variance REVENUES: Residential $ 8,520,995 $ 7,360,771 $ (1,160,224) (13.6) Non-residential 4,738,657 5,484, , Fuel adjustment 7,696,897 7,025,104 (671,793) (8.7) Utility surcharge 533, ,737 (59,095) (11.1) Other gas sales 1,316,529 1,145,336 (171,193) (13.0) Total Sales of Gas 22,806,910 21,490,232 (1,316,678) (5.8) Transfer from/(to) rate stabilization (1,099,917) (1,099,917) - - Other operating revenue 1,580, ,597 (661,538) (41.9) Other income (expense) 119, ,585 80, Build America Bonds 602, ,682 11, Total Revenues 24,009,737 22,124,179 (1,885,558) (7.9) OPERATION, MAINTENANCE AND ADMINISTRATIVE EXPENSES: Fuel expense - purchased gas 7,696,897 7,025,104 (671,793) (8.7) Operation and maintenance 1,935,815 2,505, , Administrative and general 5,329,600 3,370,550 (1,959,050) (36.8) Total Operation, Maintenance and Administrative Expenses 14,962,312 12,901,558 (2,060,754) (13.8) TOTAL NET REVENUES IN ACCORDANCE WITH BOND RESOLUTION 9,047,425 9,222, , LESS: Debt service 4,592,767 4,570,733 (22,034) (0.5) UPIF contributions 3,093,726 3,093, Transfer to City of Gainesville General Fund 1,360,932 1,360, NET IMPACT TO RATE STABILIZATION - ADDITION (REDUCTION) $ - $ 197,230 $ 197,230 - Page 6

13 Telecommunications Utility System to Comparison Over/<Under> % Variance REVENUES: Residential $ - $ 46,884 $ 46,884 - Non-residential 11,079,987 11,142,539 62, Total Sales of Services 11,079,987 11,189, , Transfer from/(to) rate stabilization 790,616 - (790,616) (100.0) Other operating revenue 179,344 11,562 (167,782) (93.6) Other income (expense) (620) (462,444) (461,824) 74,487.7 Total Revenues 12,049,327 10,738,541 (1,310,786) (10.9) OPERATION, MAINTENANCE AND ADMINISTRATIVE EXPENSES: Operation and maintenance 4,559,036 5,285, , Administrative and general 3,193,753 1,823,125 (1,370,628) (42.9) Total Operation, Maintenance and Administrative Expenses 7,752,789 7,108,721 (644,068) (8.3) TOTAL NET REVENUES IN ACCORDANCE WITH BOND RESOLUTION 4,296,538 3,629,820 (666,718) (15.5) LESS: Debt service 3,677,258 3,728,531 51, UPIF contributions 243, , Transfer to City of Gainesville General Fund 376, , NET IMPACT TO RATE STABILIZATION - ADDITION (REDUCTION) $ - $ (717,991) $ (717,991) - Page 7

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Budget to Actual Comparison. For the Year Ended September 30, 2018

Budget to Actual Comparison. For the Year Ended September 30, 2018 Contents Overview and Basis of Accounting 5 Management s Discussion and Analysis 7 Financial Statements Combined System 10 Electric System 12 Water System 13 Wastewater System 14 Gas System 15 Telecommunications